Coal Shortage in India

In News

• Recently, the Power Minister raised concerns about the coal shortage in India.

About

• As the economy recovers from pandemic blows, a sharp surge in energy demand has triggered an unprecedented fuel shortage at the country’s coal-fired stations.
• Current Availability: 
  • Of the 104 thermal plants monitored daily, 15 with a generation capacity of 14,875 MW had zero days of coal stocks. 
  • While another 39 with a capacity of 52,530 MW had stocks of less than three days. 
  • Another 6,960 MW of capacity is facing plant outage due to the unavailability of coal.

Image Courtesy: TOI 

Significance

• Primary energy contributor:
  • In India, coal is the bulk primary energy contributor, with a 57% share of its energy mix. This is not expected to change soon. 
  • By 2040, coal is expected to cover 42% of India’s new demand for energy.

Image Courtesy: IBEF 

Issues

• Demand supply gap:
  • Apart from the surge in demand and the supply shortage post-monsoon, the coal crisis has been spurred by the deficient stock build-up in April-June 2021, and the sharp fall in imports due to high international prices of coal. 
  • Normally too, all-India electricity peak demand is recorded in October, which typically follows a monsoon-impacted mining output trough.
• Import:
  • Despite such large reserves of coal, we have to import nearly 170 million tonnes of coal. 
• Unfair  Coal Block Allocation:
  • The Coal Mines (Nationalisation) Act 1973 does not allow private companies to mine coal for sale to third parties, though captive mining is allowed for specified end-use sectors. 
  • There are political sensitivities in opening up the coal sector to private investment, but it is simply not logical to keep private investment out of coal when it is allowed in petroleum and Natural gas. 
  • There is a demand to amend the Coal Mines Act 1973. 
• Underground Mining:
  • Only 15% of India’s coal production is from underground mines. 
  • The industry aims to reach a total coal production of 30% from underground mines by 2030.
  • Considering emerging hurdles in forest clearance and land acquisition in future, serious efforts need to be made to increase the share of underground production by focussing on longwall technology and productivity in underground mines.
• Coal Regulation and Pricing:
  • India has the fifth-largest coal reserves in the world. 
  • There are huge power expansions plans, which need to be fueled by coal. 
  • However, there has been no coal regulator. 
  • The idea of a Coal Regulatory Authority was mooted in 2008, but it could not be established for unknown reasons. 

Conclusion

• The move to amend the Mineral Concession Rules, 1960 is expected to benefit operators of 100 coal and lignite blocks, with an annual production capacity of 500 tonnes. 
  • Captive mines are operated by end-users of coal, including steel and power sector firms. 
  • The amended rules paved the way for releasing additional coal in the market by greater utilisation of mining capacities of captive coal and lignite blocks, which were being only partly utilised, owing to limited production of coal for meeting their captive needs.

Source: IE